Oil prices rise on U.S. stockpile drop

Oil prices climbed on Thursday following an unexpected drop in U.S. crude stocks, but gains were capped by a bleak outlook for the world’s No. 1 economy as the coronavirus pandemic crushes fuel demand, and concern over a potential second wave of cases.

Brent crude futures were up 18 cents, or 0.6%, at $29.37 per barrel at 0621 GMT. WTI crude futures were up 23 cents, or 0.9%, at $25.52 a barrel, Reuters reported.

U.S. Federal Reserve Chairman Jerome Powell warned yesterday of an "extended period" of weak economic growth and called for additional fiscal spending to stave off the fallout from the virus.

U.S. crude inventories fell by 745,000 barrels to 531.5 million barrels in the week to May 8, marking the first decline since January, the Energy Information Administration said on Wednesday. Analysts in a Reuters poll had forecast a 4.1 million barrel increase.

Amid the slump in fuel use, OPEC said on Wednesday it expects 2020 global oil demand to shrink by 9.07 million bpd, worse than its previous contraction forecast of 6.85 million bpd. It said it also expected the second quarter to see the steepest decline in demand.